When Does the IRS Pursue Criminal Charges?
The Internal Revenue Service (IRS) is responsible for enforcing tax laws and collecting taxes owed to the government. While the majority of taxpayers comply with tax laws, some individuals and businesses may engage in illegal activities to avoid paying taxes or falsify tax returns. In such cases, the IRS may pursue criminal charges against those individuals or entities.
What Are the Factors That Influence the IRS’s Decision to Pursue Criminal Charges?
The IRS considers several factors before deciding to pursue criminal charges. These factors include:
• The severity of the offense: The IRS is more likely to pursue criminal charges for serious offenses, such as tax fraud or identity theft, than for minor infractions, such as filing a late tax return.
• The intent of the taxpayer: If the taxpayer intentionally engages in illegal activities to avoid paying taxes or falsify tax returns, the IRS is more likely to pursue criminal charges.
• The level of sophistication: The IRS may be more likely to pursue criminal charges against individuals or entities that use complex schemes or techniques to evade taxes or falsify tax returns.
• The impact on the government: The IRS may be more likely to pursue criminal charges if the illegal activities have a significant impact on the government’s revenue or the ability to enforce tax laws.
• The likelihood of conviction: The IRS may be more likely to pursue criminal charges if they believe they have a strong case and are likely to obtain a conviction.
What Are the Types of Criminal Charges the IRS May Pursue?
The IRS may pursue a variety of criminal charges, including:
• Tax fraud: This includes intentionally filing false tax returns, hiding income or assets, or making false statements to the IRS.
• Tax evasion: This includes intentionally avoiding paying taxes or hiding income or assets to avoid paying taxes.
• Identity theft: This includes using someone else’s identity to file a tax return or obtain a refund.
• Money laundering: This includes concealing the source of illegally obtained funds or using illegal funds to purchase assets.
• Conspiracy: This includes plotting or agreeing with others to engage in illegal activities, such as tax fraud or identity theft.
What Are the Consequences of Being Charged with Tax-Related Crimes?
If the IRS pursues criminal charges against an individual or entity, the consequences can be severe. These may include:
• Criminal fines: The IRS can impose fines of up to $100,000 or more for each count of tax fraud or evasion.
• Imprisonment: The IRS can seek imprisonment of up to five years or more for each count of tax fraud or evasion.
• Restitution: The IRS can seek restitution for any losses or damages caused by the illegal activities.
• Civil penalties: The IRS can impose civil penalties, such as penalties for failure to file or pay taxes, in addition to criminal charges.
How Does the IRS Investigate and Prosecute Tax-Related Crimes?
The IRS investigates and prosecutes tax-related crimes through a variety of methods, including:
• Audit and examination: The IRS conducts audits and examinations to identify potential criminal activity and gather evidence.
• Investigations: The IRS conducts investigations to gather evidence and build a case against individuals or entities suspected of engaging in illegal activities.
• Collaboration with other agencies: The IRS collaborates with other law enforcement agencies, such as the FBI and the Department of Justice, to investigate and prosecute tax-related crimes.
• Prosecution: The IRS works with the Department of Justice to prosecute individuals or entities charged with tax-related crimes.
What Can You Do If You Are Under Investigation or Charged with Tax-Related Crimes?
If you are under investigation or charged with tax-related crimes, it is essential to take the following steps:
• Consult with a tax attorney: A tax attorney can help you understand the charges and the legal process, and can work to negotiate a favorable outcome.
• Cooperate with the investigation: Cooperating with the investigation and providing accurate information can help to reduce the severity of the charges or penalties.
• Take immediate action: Take immediate action to correct any errors or omissions on your tax returns and pay any outstanding taxes owed.
• Seek professional advice: Seek professional advice from a tax attorney or accountant to ensure you are taking the necessary steps to comply with tax laws and avoid criminal charges.
Conclusion
The IRS pursues criminal charges against individuals or entities that engage in illegal activities to avoid paying taxes or falsify tax returns. The factors that influence the IRS’s decision to pursue criminal charges include the severity of the offense, the intent of the taxpayer, the level of sophistication, the impact on the government, and the likelihood of conviction. The consequences of being charged with tax-related crimes can be severe, including criminal fines, imprisonment, restitution, and civil penalties. If you are under investigation or charged with tax-related crimes, it is essential to take immediate action and seek professional advice from a tax attorney or accountant.
